Fludarabine is a nucleoside analog used in the treatment of hematologic malignancies that can induce severe and prolonged immunosuppression. Although it can be incorporated into the DNA of dividing cells, fludarabine is also a potent inhibitor of cells with a low growth fraction, thus it must have other mechanisms of action. STAT1, which is activated in response to many lymphocyte-activating cytokines including the interferons, is essential for cell-mediated immunity, as the absence of this protein is associated with prominent defects in the ability to control viral infections. Here we show that fludarabine, but not the immunosuppressant cyclosporine A, inhibits the cytokine-induced activation of STAT1 and STAT1-dependent gene transcription in normal resting or activated lymphocytes. Fludarabine caused a specific depletion of STAT1 protein (and mRNA) but not of other STATs. This loss of STAT1 was also seen in cells from patients treated with fludarabine in vivo. Brief exposure to fludarabine led to a sustained loss of STAT1, analogous to the prolonged period of immunosuppression induced by exposure to the drug in vivo. Thus, STAT1 may be a useful target in the development of new immunosuppressive and antineoplastic agents.